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Performing market segmentation: A performative perspective Venter, P, Wright, A & Dibb, S Author post-print (accepted) deposited by Coventry University’s Repository Original citation & hyperlink:
Venter, P, Wright, A & Dibb, S 2015, 'Performing market segmentation: A performative perspective' Journal of Marketing Management, vol 31, no. 1-2, pp. 62-83 https://dx.doi.org/10.1080/0267257X.2014.980437
DOI 10.1080/0267257X.2014.980437 ISSN 0267-257X ESSN 1472-1376 Publisher: Taylor and Francis This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Marketing Management on 17th November 2014, available online: http://www.tandfonline.com/10.1080/0267257X.2014.980437 Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. This document is the author’s post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.
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Performing market segmentation: A performative perspective
Peet Venter (corresponding author)
Graduate School of Business Leadership
University of South Africa
Midrand 1686
South Africa
Tel: +2782-486-6801
Peet Venter is a Professor of Strategy at the Graduate School of Business Leadership at UNISA.
His research interests include strategy and marketing processes and practice. He is the editor of
three books and has published in the areas of marketing intelligence, customer relationship
management and customer retention.
Alex Wright
Open University Business School
Open University
Milton Keynes, MK7 6AA
United Kingdom
Alex Wright is Lecturer in Strategy at The Open University Business School, UK. He received his
PhD. from Nottingham University. His research interests focus on performativity, the
communicative constitution of organisation, discourse, strategy as a practice, routines and
qualitative epistemologies.
Sally Dibb
Open University Business School
Open University
Milton Keynes, MK7 6AA
United Kingdom
Sally Dibb is Professor of Marketing and Director of the Institute for Social Marketing at the Open
University Business School. Her research interests are in consumer behaviour, marketing strategy,
and social marketing, on which she has published extensively. She has written seven books and has
published in the Journal of the Academy of Marketing Science, European Journal of Marketing,
Tourism Management, Industrial Marketing Management, Long Range Planning, and European
Journal of Operations Research, among others.
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Performing market segmentation: A performative perspective
Abstract
Conceptualising market segmentation as performative enhances our knowledge of how marketing
frameworks shape marketing practice. Our study addresses the criticism that how marketing is
accomplished in practice has yet to be fully articulated. We therefore address the question: ‘How
does a market segmentation process emerge in an organisation and what causes it to materialise in
this way?’ By constructing market segmentation as performative, we are able to draw insight into
the relationships that marketing theories, models, ideas and techniques have with marketing
practice. Our longitudinal study allows us to discern four sets of actions organisations can
experience as their actors attempt to adopt and adapt a marketing process to the complexities of
practice, these are: establishing legitimacy, theory embodiment, contextualization and maintaining
the process.
Summary statement of contribution
We claim two contributions to theory. First, the messy, pragmatic and iterative nature of market
segmentation is described, which extends existing knowledge of how this important and costly
process is realised. Secondly, framing market segmentation as performative allows us to draw
insight into how the segmenting of a market shapes, and is shaped by, marketing practices.
Keywords
Market segmentation; performativity, marketing as practice, theory, case study
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Introduction
Conceptualising market segmentation as performative enhances our knowledge of how theoretical
descriptions of marketing approaches shape marketing practice. This research is needed because we
remain unclear concerning what value practitioners gain from applying marketing approaches in
practice (Yankelovich & Meer, 2006). Grapentine and Boomgaarden (2003) report that despite the
excitement they generate, market segmentation projects often fail or result in wasted effort.
Considering the significant investment of time and money associated with conducting and
implementing a market segmentation programme, this is a matter of concern that warrants further
investigation. Disquiet has been expressed over the empirical and conceptual focus of some
segmentation field studies (e.g. Quinn & Dibb, 2010); leading Dibb and Simkin (2009a, p. 220) to
caution that “despite its long academic heritage, segmentation may be failing to achieve its original
objectives”. Research is yet to fully engage with how market segmentation actually unfolds in
organisations and consequently fails to speak to practitioners of their lived experiences. Such
criticisms result in calls to rethink how research into the practices of marketing is accomplished
(Andersson, Aspenberg &Kjellberg, 2008; Bailey, Baines, Wilson & Clark, 2009; Dibb & Simkin,
2009a, 2009b; Foedermayr & Diamantopoulos, 2008; Harrison & Kjellberg, 2010; Steenkamp &
Ter Hofstede, 2002). The performative approach we adopt sheds light on how a marketing process,
market segmentation, is constituted in practice by organisational actors.
We adopt and adapt the notion of performative as first articulated by the philosopher J. L. Austin
whose series of lectures delivered at Harvard University in 1955 outlined an ontological framing of
social reality as constituted through certain verbal utterances (Austin, 1975). Austin argued that
communication is capable of more than mere representation or description, that is, specific
instances of speech create that to which they refer. A commonly cited example of such a
performative utterance is when during the naming ceremony of a ship the words “I name this ship
the Queen Elizabeth” (Austin, 1975, p. 5) are pronounced. These words, Austin argues, do not
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merely represent, express or describe, they constitute. Their utterance creates the act. Since its
speech act theory origins, the concept of performative/performativity has been drawn from by
various disciplines to help describe and explain how social realities are produced and experienced.
Recent studies in marketing have offered a performativity reading of how marketers constitute
markets and marketing (e.g. Araujo, 2007; Harrison & Kjellberg, 2010; Kjellberg & Helgesson,
2006, 2007a, 2007b, 2010). The practice of marketing is viewed as an ongoing accomplishment
(Kjellberg & Helgesson, 2010) that unfolds through a conversation (human) and materiality (non-
human) dialectic (Kjellberg & Helgesson, 2006). Araujo (2007, p. 211) argues that marketing
practices are performative as they create the phenomena they purportedly describe. While inroads
have been made into articulating a performativity understanding of marketing, the considerable
possibilities such an approach holds are yet to be realised (Kjellberg & Helgesson, 2006, 2007a).
Our interest lies in utilizing performativity theorizing to understand how market segmentation is
accomplished. In particular, we address the dearth of empirical research on market segmentation
implementation (Boejgaard & Ellegaard, 2010, p. 1294). We construct market segmentation as a
marketing process that is realised in practice through the combined actions of organisational actors
and material texts. Approaches, alongside theories, techniques, models, concepts, procedures, data-
sets et cetera (MacKenzie, 2007b, p. 55) have constitutive qualities that inter-relate to construct
marketing as practice. Our interest lies in describing how marketing techniques influence and shape
practice over time. The research question that guides our study is ‘How does a market segmentation
process emerge in an organisation and what causes it to materialise in this way?’ We claim two
contributions to theory. First, market segmentation as a messy, pragmatic and iterative
accomplishment is described, which extends existing knowledge of how this important and costly
process is realised. Second, framing market segmentation as performative allows us to draw insight
into how the segmenting of a market shapes and is shaped by practices.
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The next section explores the literature around market segmentation, highlighting the criticisms of
market segmentation research that strengthen our argument for framing it as performative. We then
review a development of Austin’s notion of performativity advanced by MacKenzie and colleagues
who continue to explore the question, “What does it mean to say that economics is performative?”
(MacKenzie, Muniesa & Siu, 2007, p. 4). This section is followed by a description and justification
of the research methodology employed. The findings section presents data drawn from the field. A
discussion follows that relates back to our research question and substantiates our two claimed
contributions. A brief conclusion completes the paper.
Literature review
Market segmentation is central to marketing strategy and a key decision area for organisations in all
sectors (Weinstein, 2004). The origins of the concept are in economic pricing theory, which
suggests that maximum profits are achieved when pricing levels discriminate between segments
(Wind, 1978). Grouping together customers with similar product preferences and buying behaviour
aids organisations in dealing with market heterogeneity, thereby focusing resources on relatively
homogeneous customer segments and thus ensuring an efficient allocation of resources (Smith,
1956). A well-established process, often shortened to STP (segmenting, targeting and positioning)
is offered in the literature as a means for carrying out market segmentation (Kotler, 1994). The first
stage, segmenting, sees customers with similar needs and buying behaviours grouped into segments
using one or more variables. Stage two, targeting, involves making resource allocation decisions
that determine the segments to be prioritized; while the third stage, positioning, entails the
development of marketing programmes that are appropriate for the targeted segments.
Despite the apparent simplicity of the STP process (LaPlaca, 1997; Weinstein, 2004; Wind, 1978),
operationalizing market segmentation in practice remains a significant challenge for organisations
(e.g. Dibb & Simkin, 2008; Goller, Hogg & Kalafatis, 2002; Palmer & Millier, 2004; Quinn, Hines
& Bennison, 2007). A major difficulty is that the theoretical description of the STP process fails to
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acknowledge the numerous restrictions imposed by the organisational context and resources. There
is, therefore, a poor fit between theoretical explanations of the market segmentation process and
practical applications (Crittenden, Crittenden & Muzyka, 2002; Sausen, Tomczak & Herrmann,
2005). These problems reflect a tension between the empirical focus of segmentation research and
practitioner needs. In a recent review of academic research priorities in segmentation, Quinn and
Dibb (2010: 1241) speak of a “gulf between the needs and interests of academics and practitioners”,
which they say reflects “the conceptual and empirical focus of market segmentation research
(Foedermayr & Diamantopoulos, 2008; Yankelovich & Meer, 2006)”. Thus, while academic
researchers have focused on theoretical and technical issues around variable selection and
identifying statistically robust outcomes (e.g. Green & Krieger, 1991; Mitchell, 1994), practitioners
must tackle practical and pragmatic implementation problems (Laiderman, 2005), such as ensuring
efficacious solutions (Wedel & Kamakura, 2000); justifying high financial segmentation costs
(Weinstein, 2004); tackling data availability problems (Simkin, 2008); acquiring sufficiently skilled
personnel (Dibb & Simkin, 2008); and, overcoming operational difficulties and cultural resistance
to change (Beane & Ennis, 1987; Clarke & Freytag, 2008). Against this backdrop there remains a
pressing need for studies that focus on the complex conditions and operational problems
confronting managers (Wedel and Kamakura, 2002).
A consequence of this separation in the literature between the planning and doing of market
segmentation is that once a segmentation plan exists, it is marketing practitioners who are tasked
with making it work (Boejgaard & Ellegaard, 2010). Given the complex and detailed actions
involved in operationalizing market segmentation, there is a particular need for studies that uncover
the underlying mechanisms, actions and relationships through which segmentation is realised.
Market segmentation in practice, it seems, is altogether messier than the literature implies. In
viewing market segmentation as performative, it becomes possible to better understand this
messiness and to unpick the politicking and practices surrounding it.
The relatively scant attention devoted to the detailed activities that underlie marketing processes is
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not confined to market segmentation alone. The broader context for this shortfall is that marketing
has lagged behind some other areas of management in describing and codifying the specific
activities that managers undertake (Skålén & Hackley, 2011; Svensson, 2007). In their study
examining the nature of marketing practice, Dibb, Simões and Wensley (2014) highlight a paucity
of research examining what they call the ‘micro-level marketing practices’. Responding to calls
from Kjellberg and Helgesson (2006), they argue for a more nuanced understanding of marketing
practices at the level of the specific tasks that marketers undertake. Such approaches, they suggest,
will bring benefits: a more bottom-up perspective will emerge, offering the potential to shed light
on “emergent and unfolding practices that actors engage in” (Araujo, Kjellberg & Spencer 2008, p.
7); it will provide detailed insights into how practitioners undertake marketing activities (Grönroos,
2006; Skålén & Hackley, 2011); and ultimately will support a deeper understanding of the
connection between marketing practice and organisational performance.
These are among the reasons why marketing research has taken a performativity turn in recent years
(e.g. Araujo, 2007; Harrison & Kjellberg, 2010; Kjellberg & Helgesson, 2006, 2007a, 2007b,
2010). Kjellberg and Helgesson (2006, p. 842) consider that a focus on market practices encourages
a view of marketing practices that integrates the sellers who market goods with those who buy
them; and, in the process provides a micro-level focus on how such activities are accomplished. A
practice focus is sensitive toward a relational ontology (Emirbayer, 1997); which holds that it is not
entities or things such as marketing theories, ideas or approaches that are in and of themselves
consequential, but how they relate to other things and entities that reveals something of how the
mangle of marketing practice (Pickering, 1993) is constituted. To study practitioners engaged in
relational practice as it unfolds is challenging (Araujo, et al., 2008), which goes some way to
explain the dearth of practice studies in marketing. However, a first step is to move the analytical
focus from an aggregated level (cf. Andersson, et al., 2008), what Latour (1986) termed the
ostensive, to what he called the performative. By refocusing the analytical lens on the relational
practices of marketing it becomes possible to describe what marketing is, of what it is made, what
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are its parts and how they constitute the whole (Latour, 1986).
Kjellberg and Helgesson’s (2007a) performativity-inspired consideration of market segmentation
exposes a key assumption in research that is not sensitised to how social realities are constituted. As
the STP process implies, traditional studies address segmentation as an epistemological issue:
segments objectively exist and it is the task of the marketer to unveil them. A performativity lens
frames market segments as an ontological statement, as they are described and, through such
communicative acts, constructed (Hagberg & Kjellberg, 2010; Kjellberg & Helgesson, 2007a).
Conceptualizing segmentation as performative encourages researchers to inquire into how ‘strings
of association’ (Cooren & Fairhurst, 2009) comprised of human and nonhuman dialectics
(Andersson, et al., 2008) co-orient towards the constituted ‘object’ that becomes segmentation. Of
particular interest to those interested in how relational strings of associations perform and produce
practice, are the ways that theories, ideas, approaches and models materially interact with the moves
of actors. Such questions, for example, have occupied MacKenzie and motivate his studies of the
sociology of economics.
Building on the theorizing of Austin (1975) and Callon (1998), sociologist Donald MacKenzie has
perhaps contributed most to articulating the complex relationships between models, theories and
approaches, and practice. MacKenzie’s initial work analysed how the Black-Scholes-Merton model
of options pricing influenced and shaped the behaviour of economists operating in the Chicago
Board Options Exchange during the 1970s (see MacKenzie, 2003, 2003, 2007, MacKenzie & Millo,
2003; MacKenzie, Muniesa & Siu, 2007). When it first appeared, the Black-Scholes-Merton model
claimed to show how options could be disentangled from any moral framework and proved and
hedged as part of the normal operations of mature efficient capital markets (MacKenzie, 2007).
Initially, the model offered a relatively poor fit with market prices (MacKenzie, 2007), and failed to
offer traders a quick and straightforward means for accurately identifying the price of options. At
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this time the model displayed no performative qualities. However, the model proved attractive and
compelling to traders and the materiality that accompanied it made it easy for them to use. Despite
its relatively poor fit, over time it was increasingly used by traders in the Exchange who gradually
altered their behaviour so that the model became a more accurate representation of practice.
MacKenzie drew from performativity theory to explain how this ill-fitting model could over time
become performative: meaning that the model changed the behaviour of the human actors that
adopted it such that the practices they were producing and reproducing began to resemble the
Black-Scholes-Merton model more and more. MacKenzie’s findings relate to how an economic
model through its consumption created the reality it purported to represent. Marketing models,
approaches and processes do not claim to represent reality, but do claim to help practitioners order
reality into something manageable and beneficial to their aims. In short, marketing approaches like
segmentation claim to help sellers sell and buyers buy. MacKenzie’s work developing the notion of
performativity is instructive for his focus on the inter-relating of models, ideas and approaches with
practice, as it provides those interested in articulating a view of marketing as practice with a
language for describing and explaining how marketing emerges in the form that it does. From his
research, MacKenzie (Table I) distinguished three different kinds of performative relationship
approaches and practice can display. Counterperformativity was also identified, which can be
discerned when the connection between a model and the practice it stimulates becomes
progressively disentangled.
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Table I Three kinds of performativity and counterperformativity
Type of performativity Key characteristic Relationship strength Research interest
Generic Models, theories, ideas and approaches used but with little significant impact
The relationship is weak and does not significantly affect practice
When a theory or idea is assumed to have a strong effect on practice but its investigation reveals this not to be the case. When mundane, taken-for-granted practices are disrupted and inquiry reveals those practices to have little relation with the theories they were assumed to represent.
Effective Models, theories, ideas and approaches that have an effect on marketing processes
The model makes a difference to how processes are accomplished. These processes differ from those organisations where the model is not used. The relationship strength is significant.
When an approach makes a difference, but not in the ways necessarily expected. Rewards investigation, as complex relationships between approaches and practice are revealed that prove insightful.
Austinian Use of a model, theory, idea or approach changes workplace processes such that resemble the idea or approach more and more.
A strong relationship is distinguishable. Likely to be empirically rare in marketing studies.
What is most commonly assumed to be the relationship between theory and practice, yet may be difficult to realise due to the complexities of practice. Because this pure form of performativity is likely to be rare, the translations processes adapting an approach to a specific context reward investigation for the insights into practice and theory they promise.
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Type of performativity Key characteristic Relationship strength Research interest
Counter-performativity Use of a model, theory, idea or approach makes workplace processes appear less like they depicted in the idea or approach.
A declining relationship can be discerned. Unlike Austinian performativity, what is done in practice resembles the idea less and less, and can result in its opposite affect being realised.
Sometimes called overflowing, or misfires (Callon, 2010), and perhaps the most analytically revealing of all types, this construct can be observed through longitudinal tracking of an approach and its use over time. May help to question the efficacy of some long-standing marketing theories and ideas.
Source: Distilled from D’Adderio (2008), MacKenzie (2004, 2006a, 2007), Cabantous, Gond & Johnson-Cramer (2010), Kjellberg & Helgesson (2006), and Callon (2007).
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In summary, our study addresses two gaps in the literature. First, a detailed understanding of the
practice of segmentation, or how segmentation is actually accomplished in practice, is yet to be
fully articulated. We know much about the concepts and processes of market segmentation, but
rather less about how practitioners actually set about the complex task of realising the segmentation
process in practice. Second, of the relatively few marketing studies that have adopted a
performativity lens, most have drawn inspiration from Callon and have discussed how markets are
made (e.g. Kjellberg & Helgesson, 2007, 2010). Our focus, inspired by the studies by MacKenzie,
is on how marketing processes are performed in practice. Therefore, our objective is to extend
understanding of how marketers accomplish their craft by constructing insights into the practice of
market segmentation. In so doing, we unpick the complex and multifaceted relationships that
marketing processes, such as segmentation, enjoy with entities inside and outside the organisation
and marketing practices. By addressing these interrelated aims and developing a deeper
understanding of the how and why of market segmentation implementation, we contribute
significantly to our developing knowledge of marketing theory and practice.
Research methodology
This research involved a longitudinal case study situated in the business sales division, an SBU
(strategic business unit) in ICT Co SA, a large national ICT services organisation majority owned
by a European multinational company (MNC). Figure 1 summarises the organisation at the time
that the research commenced. A single case study approach was appropriate because it enables a
detailed examination of the practices associated with the segmentation project, beginning with the
early planning stages and running through to implementation and beyond. Bonoma (1985) contends
that qualitative case study research is appropriate in marketing research when the phenomenon
(such as market segmentation implementation) being studied cannot easily be observed outside of
its natural setting, and where it is so complex that it cannot be quantified. This notion is supported
by those studying performativity who have drawn extensively on single cases as they involve the
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in-depth and prolonged study of complex processes such that their relationship with models,
theories and ideas can be established (e.g. MacKenzie, 2007b; Kornberger & Clegg, 2011; Ottosson
& Galis, 2011).
The first author was able to use his role as an academic consultant with ICT Co SA to achieve the
good quality access needed to closely observe the unfolding market segmentation process, and we
accordingly used a participant observer approach. Our qualitative study reflects the requirement for
multiple data sources in case construction (Bonoma, 1985), as it draws from: participant
observation, document analysis, and personal interviews. In this instance, the participant observer
had access to a plethora of artifacts (data, communications, reports, online databases, and
presentations) and was engaged in many hours of formal meetings, informal discussions and e-mail
exchanges with key players in the organisation’s head office and eight regions.
The research project unfolded along the lines described in the first two stages of the case study
process proposed by Bonoma (1985). The first author has been involved with the organisation
since 2004 as an academic consultant. The first few years of the engagement were, in retrospect,
akin to what Bonoma (1985) describes as the ’drift’ stage. Despite the absence of a formal research
question during this stage, it offered the researcher the opportunity to gather a deep understanding
of the context that was later to be more formally investigated. The second stage of the research,
namely the ’design’ stage (Bonoma, 1985), started in 2008 and continued until 2012. During this
period the major areas of research as identified during the drift stage were assessed, refined and
fleshed out. Our focus became to examine the processes and practices practitioners utilized to
implement a specific market segmentation project in ICT Co SA.
Rick, the manager of strategy development, was our primary access point and a major source of
information. He reports to the executive responsible for sales and marketing to small and medium-
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sized enterprises (Director of SME business). His responsibilities include strategic marketing
planning and the provision of marketing intelligence to his own section and those of the three other
executives in the SBU. Business segmentation development and implementation has been a
constant priority for the section since 2004. Rick has three direct reports, with the manager of
business intelligence being responsible for developing and updating business market segmentation.
Other managers in the organisation are responsible for additional aspects of the market
segmentation project. For example, the manager of special projects (Lou) is in control of integrating
market segmentation with the customer relationship management (CRM) system.
Figure 1 The ICT Co business sales organisation
Table II contains the interview schedule. We use pseudonyms and titles to protect the anonymity of
the respondents. Nine interviews were conducted during the initial round, followed by a further five
follow-up interviews. They were conducted in English or Afrikaans by the first author (and
translated into English) depending on the interviewee’s preference. The interviews were semi-
structured to ensure that certain theoretical themes were addressed, while allowing other topics to
be explored as they emerged. A conversational style was adopted, with interviews lasting between
Director: strategic accounts
Director: govern-ment accounts
Director: SME busi-ness
Director: complex solutions
Managing director: commercial
Manager: strategy development
Manager: business intelligence
Manager: special projects
Manager: market-ing strategy
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30 and 60 minutes. The interviews were structured around a simple checklist of issues that explored
(1) the market segmentation process and how it was approached, (2) marketing activities related to
the market segmentation process, (3) how the segmentation was received by organisational
members and whether resistance occurred, and (4) important relationships (formal and informal)
and how these were managed. While interviews were the primary data source, we also drew from
reports, observation, and informal conversations to add breadth and depth to our findings ensuring
data credibility and quality (Flint, Woodruff & Gardial, 2002). Following Mitchell (1983), we do
not claim that the specific context of ICT Co SA is generalizable to other populations, however
similar, but we do argue that our findings can be used to develop further theorising regarding
marketing performativity in general and market segmentation performativity in particular.
The interview data were analysed using ATLAS.ti software. We employed a process of “meaning
condensation” (Lee, 1999: p. 89) to extract the most important themes from the data. Analysis was
iterative, involving a constant to-ing and fro-ing among the interview transcripts, documentation
and notes taken during the segmentation process. As we held the assumption that market
segmentation is performative, an inductive process was used to hear the data speak. Since the
purpose of our analysis was both description and explanation, we progressed from description to
explanation as the underlying generative mechanisms (Easton, 2010) in ICT Co SA’s market
segmentation process became apparent. The segmentation narrative that appears in the next section
was developed as a result of this process.
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Table II Interview schedule
Person
interviewed
Role in organisation Number of interviews
Rick Manager of strategy development (see
Figure 1) and empirical focus of the
study
Two
Gavin Director of SME business (see Figure 1)
and Rick’s manager
One
Theresa Customer insight manager in the Group
Strategy division. Rick’s peer in another
organisation
One
(Interview translated from
Afrikaans)
Rachel Manager of business intelligence (see
Figure 1). Rick’s direct report with the
responsibility of communicating and
implementing segmentation in the
organisation.
Two
Lou Manager of special projects (see Figure
1). Rick’s direct report with the
responsibility of implementing CRM
and business intelligence systems in
support of strategy.
One
(Interview translated from
Afrikaans)
Eddie Regional sales manager and internal
client of market segmentation
Two
James Regional sales representative and
internal client of market segmentation
One
Joanne Regional sales representative and
internal client of market segmentation
One
Carl Product manager and internal client of
market segmentation
One
Mark Associate of the academic consultant
and academic consultant
One
(Interview translated from
Afrikaans)
Business market segmentation in ICT Co SA
The market segmentation process in ICT Co SA unfolded over four phases (Figure 2). Phase one
was introductory and involved actors working together, some for the first time, and laid the
foundations for the rest of the process. During phase two, the segmentation process was initiated
17
through four distinct steps, described below, that closely resemble the approach of gathering data
for the purposes of generating segments, as advocated in the segmentation literature. During this
phase, however, problems emerged and the process began to falter. In phase three, as a
consequence of the segmentation process being revived by a project champion, it became more
widely adopted in the organisation. Phase four focuses on the more detailed aspects of the
implementation.
Phase One: Building the foundations for segmentation
The working relationship between the academic consultant (first author) and the organisation began
in 2004, when the director of SME business attended an executive education programme at the first
author’s business school. Their mutual interest in strategic marketing led to informal discussions,
culminating in a request to assist ICT Co SA with a project to estimate its market share across key
business sectors. The output of this project was a set of ‘market maps’ that explained market share
in terms of revenue and volume. Although this outcome was a long way from an extensive
segmentation exercise, it was contextually important because it shaped the relationship between the
academic consultant and the firm and established the legitimacy of the academic consultant. The
activity also established the value of empirical market research as a basis for decision making, and
paved the way for the subsequent market segmentation process.
From the market map to the segmentation model to [parent company segmentation model]
was a perfect track. It was really just a matter of folding the data into the segmentation
model. A key difference for me between the two was that one was almost an executive tool,
whereas the segmentation model is structured in a format that I felt we could actually drive
through the organisation because you could strip out elements and it would still make sense
to the end users within the organisation.
(Manager of strategy development)
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Figure 2 The ICT Co business segmentation process
Phase 1: Introductory phase
Phase 2: Initial segmentation
1. Management workshop 2. Qualitative research 3. Quantitative research 4. Strategy development
Phase 3: Segmentation revival
- Leveraging parent company regulations - Changing presentation format
- Positioning segmentation as business strategy
Phase 4: Implementation
- Simplification - Selling - Systems - Structure
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Phase Two: Developing needs-based business segments
During the second phase, discussions between the director of SME business and the first author
suggested a more nuanced study of business customer needs and segments was needed, reflecting
the organisation’s increasing focus on SMEs. A decision was made to conduct a detailed study to
identify and profile business market segments. A U.K.-based consultancy headed by a well-known
academic whose work was much admired by the director of SME business, was engaged to oversee
the business segmentation process. A series of steps were following during this second phase to
develop the segmentation. These steps mirror the approaches to developing segments that are often
described in the literature (See, for example, Dibb & Simkin, 2008; McDonald & Dunbar, 2004;
Weinstein, 2004).
Step 1: A two-day workshop held with business unit managers, with the purpose of developing a
deeper understanding of the possible business market segments and their needs.
Step 2: Qualitative research conducted through in-depth interviews with about 20 typical customers
representing potential segments. The purpose of this was to determine ICT needs, buying
behaviour and purchasing decision criteria. This qualitative research served as a key input
into the next phase, a quantitative survey.
Step 3: A quantitative survey undertaken covering several hundred respondents to obtain data
concerning their needs, buying behaviour and decision criteria. The outcome was a
quantitative profile of five different segments, which was later collapsed into four segments.
These segments were clearly differentiated according to their need for managing mobile
assets and their relative business complexity. The segments were supported by detailed
descriptions and data outlining the aspects differentiating the segment, such as their key
buying requirements, ICT purchasing decision-making processes, current product usage and
future behavior. Table III contains a brief description of each of the segments.
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Table III Descriptions of needs-based segments
SEGMENT SEGMENT DESCRIPTION
Small statics (33% of
population)
In this segment the businesses are typically small and operating on a
single site. Businesses are relatively simple, and there is a low need for
mobile management of assets or ICT services in general. They do make
extensive use of fixed broadband services and Internet access.
Complex statics
SMMEs (23% of
population)
In this segment, businesses are typically medium to large in size and
more complex, but have a low need for mobility. However,
telecommunications and ICT is very important to them. Despite this,
they are generally not very progressive with regards to technology, and
seem to feel that they are constantly playing “catch-up”. They have a
relatively high need for international connectivity.
Simple mobiles (26%
of population)
Businesses in this segment displays a high need for relatively simple
ICT solutions such as staying in touch with mobile employees,
managing mobile assets, remote diagnostics, Internet access and e-mail.
They have a high need for managing mobile people and assets, but a
low need for more complex solutions and international connectivity.
This segment contains comparatively high users of satellite tracking,
dedicated data lines and mobile data services.
Complex
sophisticates (18% of
population)
These businesses are larger and have much more sophisticated ICT
needs. They may have several points of presence and may need to
manage a geographically dispersed network. They are especially
characterised by the need to expand the business and to be able to
communicate in a variety of ways - both fixed line and mobile. These
organisations often have very flat structures and see themselves as “fast-
moving”. They have a very high need for international connectivity.
Step 4: Following feedback to the business unit in presentation and report format and discussions
regarding segmentation in all the regions, potential strategic initiatives to target attractive
segments were identified and included in the final report. Quantification was at this stage
already identified as imperative to the management team of the business unit, as it
ostensibly provided a strong basis for identifying opportunities for business growth, and
played a more political role as a tool for negotiation.
Although the potential benefits that segmentation offers were understood and despite some positive
responses to the process in general and to the information that resulted from it, implementation
stalled after Step 4 was completed.
Phase Three: Reviving the segmentation process
This phase commenced with the appointment of a manager of strategy development (Rick) who had
previous experience in a large consultancy firm and who was ultimately the catalyst to inject new
21
life into the segmentation process. He achieved this in three ways: first, by leveraging his
relationship with the parent company to obtain access to the segmentation work that was done in
Europe; second, by presenting it in a highly visual and user-friendly presentation format; and last,
by emphasising the strategic role of market segmentation and the benefit that this could bring.
Initially, Rick had been appointed as a middle manager responsible for business process
development, but as his talents for networking, business analysis and strong presentation skills
became apparent, he was soon assigned responsibility for strategy development for the whole
business unit. As part of his personal development in this position, he was sent to the European
MNC headquarters, where he was exposed to its business segmentation practices. On his return, the
first author was engaged with the remit to merge the existing segmentation data with the European
segmentation scheme and to present the resulting segments in a highly visual and colourful format.
The basis for the European segmentation was a combination of size and vertical industry sectors
forming seven different segments. This approach contrasts greatly with the use of customer
characteristics, needs, decision-making and purchasing behaviour so often recommended by
segmentation theorists (e.g. Simkin, 2008; Wedel & Kamakura, 2002). For example, for small and
medium-sized businesses the two identified segments split the population into two segments: the
more sophisticated service businesses such as financial, ICT and business services, and the rest, for
example agriculture, manufacturing and the trade sector (wholesale and retail businesses).
In addition to leveraging the work that had already been done, using the same segmentation basis
provided a level of legitimacy and helped the subsidiary to ‘fit in’ with the corporate parent’s
practices:
Work that was done with consulting houses at the [parent company] level and they could
send it through to us. Specific channel strategies, if you’ve got a reference point, (a) we need
to align ourselves with our parent to begin with, but (b) they applied their minds to it. It
gives you the right building blocks... It’s absolutely a huge benefit for us.
(Manager of strategy development)
Whereas the initial segmentation structure was in the form of a written report, the medium for the
22
revised segmentation structure was a highly visual presentation, which quickly proved of value to
other managers and executives:
I think people immediately locked onto it. When we went to the SME workshop, there were
about five or six presenters and out of the six presenters four or five actually used the
presentation flyers that we actually developed on the segmentation study...
(Manager of business intelligence)
In addition to leveraging the intellectual assets of the parent company, Rick astutely positioned
segmentation as a means for the business unit to ‘own’ business strategy, as opposed to the firm’s
corporate strategy which is ‘owned’ by Group Strategy and the top management team:
Segmentation has three levels: You’ve got the market segmentation, business segmentation
and then the individual profiles to drive that in the organisation, but also to put those
platforms in place. So we see segmentation to be the cornerstone for the operational strategy
and ultimately the business strategy, and we wanted to own that.
(Manager of strategy development)
Phase Four: Implementing the segments
Phase four entailed the implementation of market segmentation processes within the organisation.
This involved both an internal ‘selling’ exercise and a process of embedding the scheme into the
firm’s systems and structures. As part of the selling exercise, a more modular presentation of the
segmentation data in an online interactive hyper book format was developed. The organisation’s
advertising agency was also engaged to simplify the presentation into an accessible brochure. This
was part of a drive by the Director of SME Business to make the segmentation simpler and more
user-friendly:
[We] decided to put it into [an online format], which is what I’m currently focusing on... It’s
got the segmentation study in electronic format, which is absolutely amazing. The first stage
of the segmentation study is that big block with the various segments. You can click on each
segment and it takes you to that actual chapter.
(Manager of business intelligence)
The linking of customers to specific market segments is a critical part of the segmentation process.
However, the firm’s information systems had not been developed with this specific segmentation
structure in mind. Therefore, as part of the process of linking customers to segments, there was a
need for salespeople and other customer contact staff to update customer data as part of their
everyday duties. In addition, there was a desire within ICT Co SA to use market segmentation
23
beyond its strategic purpose as a tactical and operational sales tool. Thus, some of the processes to
encourage its use could be viewed as coercive, even if the motive was to provide the users with
valuable information:
And I believe that its where we will unlock the most value from the segmentation, by
educating throughout the organisation, not just at the executive layers; the model that we’ve
created, give it to them in a palatable format that they can adopt and apply to their daily
lives, because it’s valuable to them, it gives them insight. Beyond that, we’re also forcing
them. So it’s a soft touch but there’s also a hard element to that. It will be embedded in all
the systems.
(Manager of strategy development)
Ultimately, the business unit was restructured in 2011 to broadly reflect the new segmentation
structure, and in 2012 was further updated with new enterprise population figures. These
developments suggest that despite a slow start and resistance from some executives, the
segmentation structure had gained a strong foothold in ICT Co SA.
Our findings suggest that in its early stages, the segmentation process was based on strong
theoretical principles and accepted ‘best practice’, following the widely accepted segmentation-
targeting-positioning conceptualization and using needs-based segmentation, customer decision-
making and purchasing behaviour as its basis. However, as other actors became involved the
process developed more opportunistically and intuitively, as individuals made sense of and coped
with their situational contexts. The process also displayed strong elements of trial-and-error type
experimentation. For example, at one point ICT Co SA conducted an extensive alternative
segmentation study based on attitudinal segmentation; but this was abandoned because the
implementation of the segments would have been difficult to achieve. While the segmentation
approach had its roots in theory and ‘best practice’, it ultimately turned out to be a much messier
process than anticipated. The final outcome was a fairly simple segmentation scheme based on
enterprise size and vertical sectors. Although not typical of what is regarded as ‘best practice’,
because of the materiality associated with the segmentation schema it was more readily accepted by
the organisation.
24
Discussion
Our focus is on how organisational actors accomplished a segmentation exercise through
performing, to greater or lesser degrees, a market segmentation process in practice. We assume that
theories, models, processes and approaches are seldom transferred to practice unaltered, as they
inevitably undergo some form of translation. We further assume that the use of marketing theories,
models or techniques is not neutral; that is, the use of a particular marketing process is likely to
contribute towards the construction of a social reality where that process is deemed to be useful and
accurate. In short, implementing market segmentation produces segments that are not pre-given but
created through segmentation acts. Once created, these segments become accepted as representing
social reality. Our interest lies in understanding how the market segmentation process and the
theoretical ideas that underpin it actively contributed to the accomplishment of market segmentation
in ICT Co SA.
Our findings allowed us to construct insight into the specific activities managers undertake (Skålén
& Hackley, 2011; Svensson, 2007) when they draw from theory to constitute their own practice.
We discern four sets of performative actions managers accomplish and consider their relationship to
segmentation theory. MacKenzie identified three types of performative relationship: generic,
effective and Austinain; and one relationship of counterperformativity. Our study identifies
instances of both effective and the rarely seen Austinian performativity. We speculate that in time it
is likely we would also observe counterperformativity. Our four sets of actions are linked to the
four phases presented in our findings section, but this association is not a neat coupling of each
phase to its correspondingly numbered action. Rather, the performative actions we identify tend to
occur in parallel rather than sequentially, the boundaries between them are blurred rather than rigid
and subject to periods of inactivity rather than constant. The four sets of actions we identify allow
for a structuring of analytic insights, they are: establishing legitimacy, theory embodiment,
25
contextualizing and maintaining the process. We structure the remainder of the discussion section
around these, beginning with establishing legitimacy.
Establishing legitimacy
When embarking on a large-scale change process, the concept and the actors that are driving and
leading it have to be seen as legitimate to the wider organisational audience for their ideas to
become established. The instances of performativity already referred to (Austin, 1975; MacKenzie,
2003, 2007), could only occur because the legitimacy of the actors involved and their ideas had
been assured. Legitimacy can be established in numerous ways. In ICT Co SA, the internal lead
actors (director of SME and first author) were deemed sufficiently legitimate for the process to
begin. Even so, external authority in the form of a U.K.-based management consultancy was felt to
be necessary to assure organisational actors that the process was legitimate. Legitimizing acts were
especially evident, but not limited to, the first phase outlined in the findings (building the
foundations for segmentation). Legitimacy can also emerge when material objects were seen to
‘act’ when the segments were implemented. When processes like market segmentation are inscribed
into material artifacts, documents (either electronic or paper) are produced, distributed and
consumed and become part of an official discourse. A segmentation discourse relies on texts to
sustain and advance it, thus enabling the process and its outcomes to become formalized within the
organisation. A discourse materialised in and through texts has been made to materially matter.
Legitimate practice is constituted through the interplay of conversation (talked into being) and text
(material artifacts are inscribed with the discourse). A formal discourse is also a performative
discourse as it constitutes that to which it refers, and also marginalizes other potential alternative
discourses. Legitimacy building does not end when the process has become established; it needs to
be continually refreshed as discourses can and do lose their performative powers.
Theory embodiment
26
The second set of actions occur when legitimacy of the actors and the theoretical approach has been
established resulting in a general acceptance of the need to embody the new theory or approach. We
use the term embody rather than enact or implement, because we wish to emphasize that
practitioners draw on their whole bodies when implementing a marketing process like market
segmentation. Marketers are not just mouths that speak and brains that think, but people that move
about, point, gesture, occupy and produce space and generally communicate non-verbally as well as
verbally. In ICT Co SA, the acts that embodied market segmentation were the point at which
practice most closely resembled its depiction in the literature and, as such, it was the closest we
came to an instance of Austinian performativity. Actions here are closely drawn from phase two,
during which the initial needs-based segmentation was conducted. Austinian performativity occurs
when organisational processes resemble how a theory or approach is depicted more and more. This
type of performativity is empirically rare, because theories nearly always undergo some form of
translation when they encounter the messy world of practice. This observation is more than a
simple truism. It denotes that when academics discuss concepts like market segmentation, we tend
to discuss them in their idealized forms, not in the way practitioners experience them. One of the
reasons for the growing tensions surrounding marketing research and practitioners’ experienced
realities could be that marketers’ everyday experiences are marginalized from our academic
discourses. The actions constituting theory embodiment can be characterized as being when actors
in ICT Co SA sought to integrate market segmentation into existing management processes and this
was done largely as prescribed in the literature. However, the gap between theory and practice was
significant and the next set of actions produced an increasing departure from how market
segmentation was depicted.
Contextualization
Towards the latter stages of the actions that saw theory embodied in practice, market segmentation
in ICT Co SA began to stall. As considerable investment had been made it was necessary to turn
27
this around. Attempts to implement segmentation in any Austinian sense, i.e. closely resembling
how it is depicted in the marketing literature, were abandoned, and a more pragmatic, context
relevant approach involving intuition and trial-and-error began. The role and importance of material
artifacts and texts were increasingly recognised. They were seen as not merely used, but ‘to act’ in
the sense that they made a difference to how practice unfolded. We see here instances of effective
performativity (MacKenzie, 2007), as use of a model or approach affects an organisation’s
processes and makes them different to an organisation that does not use that model or approach.
However, use of the approach does not result in practices that resemble the model more. We term
these actions ‘contextualization’ because it seems that effective performativity occurs when the
tensions between theory and practice are at their most strained. Actors recognise the value and
importance of the theoretical depiction of a process, but are confronted with the realities of their
working contexts, which are messy and full of contradictions and competing priorities. Reconciling
the two becomes increasingly difficult. ICT Co SA recognised the advantages of aligning its
segmentation with that of its European parent. Its move to employ visual methodologies to
communicate its segments represents an appreciation of the power of pictorial representation. These
and other moves witnessed a shift away from theoretical descriptions of segmentation, although
ICT Co SA still ‘did’ segmentation, albeit in a way that diverged from how it is described in the
literature.
Maintaining the process
While the strongest relationship between theory and practice was discerned when theory was
comprehensively embodied in the actions of practitioners, and acts of contextualization witnessed a
growing tension between theoretical depictions and pragmatic concerns; the final set of actions
centered more and more on practical coping. In ICT Co SA, maintaining the process focused on
integrating the new practices associated with market segmentation into existing discourses and
processes. Chiefly, this involved selling the results internally and ongoing system and structural
28
embedding. These are some of the practical implementation tasks associated with market
segmentation that have received little attention in academic work (Goller, et al., 2002; Quinn, et al.,
2007; Verhallen, Frambach & Prabhu, 1998) and which we need to understand better if theories and
approaches are to shape practice. We observed over time a gradual distancing of segmentation as
ICT Co SA was accomplishing it with how it is depicted in the literature. The label ‘market
segmentation’ was retained, as this gave the practices an authority and legitimacy they would not
have otherwise had, but what happened in practice resembled theoretical descriptions of market
segmentation less and less. We speculate that with the passage of time, market segmentation in ICT
Co SA could become what MacKenzie terms a counterperformative, meaning that although the
activity bears the name, the actions resemble theoretical descriptions less and less. While these acts
overlap with the implementation of the segments (phase four in our findings), they go beyond mere
implementation, as they also include the constant re-establishment of legitimacy and adjustments to
the segmentation as it is contextualized on an ongoing basis.
The concept of performativity allows us to discern a more nuanced relationship between marketing
processes, like market segmentation, and their manifestation in practice. To simply say that a
technique is implemented tells us little about how it makes a difference to those who have adopted
it. In turn, this gives us little useful insight with which to develop and refine our theories. All
marketing theories, models and approaches are constitutive in that they construct as well as describe
and explain. They themselves ‘use’ as much as they are ‘used’. Sensitivity towards the performative
alerts us to the constituting effects of theory and offers us a language for discerning its uneven
affects.
Conclusion
This paper addresses the question: ‘How does a market segmentation process emerge in an
organisation and what causes it to materialise in this way?’ To achieve this, we have utilised a
29
performativity lens as this provides researchers with the opportunity to offer insights into how
marketing processes are performed in practice. An analytical focus on the performative actions of
actors increases knowledge of marketing as practice, and holds the potential of stimulating more
relevant advice for practitioners as their everyday challenges, concerns and contradictions are
integrated into research accounts. Our first contribution lies in extending knowledge concerning
how market segments are constituted in organisations. Our fine-grained study demonstrates the
pragmatic obstacles managers have to overcome if they are to successfully adopt and adapt
concepts, models or approaches drawn from academic theory. The second contribution relates to the
insights a performativity perspective of longitudinal practice can provide. Performativity theory
encourages a relational framing of managerial activity such that single events or experiences are
made sense of in a conceptual whole. Performativity theory assumes that organisation unfolds in a
conversation and text dialectic, which recognises that non-human texts can ‘act’ and influence how
marketing practice is accomplished. The insights emerging from our study allow us to outline four
sets of actions involving establishing legitimacy, theory embodiment, contextualisation and
maintaining the process as exemplifying processes of marketing theory implementation.
30
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